The trend estimate for total new capital expenditure (in volume terms) increased by 2.0% in the September Quarter 2004. It increased 1.3% in seasonally adjusted terms.

After two years of decreasing growth rates in the trend estimates, the rate of growth has increased for the past two quarters. Expectations for the remainder of 2004-05 are quite strong so it is projected that growth will continue.

Expenditure on building and structures has had steady growth for the past seven quarters while expenditure on equipment, plant and machinery has increased slightly for the past two quarters.

EXPECTED EXPENDITURE

This issue includes the fourth estimate for 2004-05.

Estimate 4 for 2004-05 is $53,682m. This estimate is 4.3% higher than the comparable estimate for 2003-04 and 9.5% higher than Estimate 3.

See pages 6 to 9 for further commentary on expectations data.

NOTES

CHANGES IN THIS ISSUE

To assist users in interpreting data in this release the range of graphs and accompanying commentary has been expanded.

As happens each year, a seasonal re-analysis has been undertaken based on estimates up to and including the June quarter 2004. As part of this year's re-analysis, a number of the aggregation structures were amended to bring the seasonal adjustment methodology more into line with that used for the equivalent National Accounts series. This has resulted in revisions to seasonally adjusted estimates for most time series for expenditure on equipment, plant and machinery in this release.

The underlying price indexes used in the compilation of the chain volume measures have been reindexed resulting in minor revisions to the chain volume measures from September quarter 2000 onwards.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Fiona Cotsell on Sydney (02) 9268 4357.

ACTUAL NEW CAPITAL EXPENDITURE IN VOLUME TERMS

TOTAL CAPITAL EXPENDITURE

The trend estimate for total new capital expenditure increased 2.0% in the September quarter 2004. This is the fourteenth consecutive increase, and although the rate of growth had slowed significantly since December quarter 2002, it has started to increase in the past two quarters.

BUILDINGS AND STRUCTURES

The trend estimate increased 2.4% this quarter, after eleven consecutive increases since March quarter 2002. Manufacturing led the increase in buildings and structures this quarter (up 8%) with both Mining and Other selected industries increasing slightly.

EQUIPMENT, PLANT AND MACHINERY

Trend estimates for equipment, plant and machinery increased by 1.6% in the September quarter 2004. The estimate has been increasing since June quarter 2001 but the rate of growth has been quite low in the most recent quarters. Both Manufacturing and Other selected industries increased slightly this quarter, offsetting a small fall in Mining.

MINING

After three quarters of decreases, trend estimates for Mining were flat in the September quarter 2004. Equipment, plant and machinery decreased slightly this quarter after two quarters of strong decreases, while building and structures increased slightly.

MANUFACTURING

The trend estimate increased 2.9% this quarter, the second consecutive increase. Manufacturing had strong growth up to June quarter 2003 and then fell slightly for three quarters. The current rate of growth has been consistent for the past two quarters. Buildings and structures has had a strong increase this quarter (up 8%) whilst equipment, plant and machinery increased slightly.

OTHER SELECTED INDUSTRIES

The trend estimate for Other selected industries increased 1.9% in the September quarter 2004, the thirteenth consecutive quarter of growth. The rate of growth has been relatively unchanged over this period. Equipment, plant and machinery has increased at a slightly higher rate than buildings and structures this quarter. The rate of growth for buildings and structures has been declining for the past four quarters.

ACTUAL AND EXPECTED NEW CAPITAL EXPENDITURE

FINANCIAL YEARS AT CURRENT PRICES

The graphs below show the seven estimates of actual and expected expenditure for each financial year. The estimates appearing below relate to data contained in tables 5 and 6. Advice about the application of realisation ratios to these estimates is in paragraphs 24 to 27 of the Explanatory Notes.

The timing and construction of these estimates are as follows:

TOTAL CAPITAL EXPENDITURE

Estimate 4 is 4.3% higher than the comparable estimate for 2003-04 and is the highest estimate on record. Buildings and structures contributed all of the increase (up 23%), with equipment falling by 5%.

Estimate 4 is 9.5% higher than Estimate 3 for 2004-05. The increase from Estimate 3 is spread across all industries and both asset types.

BUILDINGS AND STRUCTURES

The fourth estimate for buildings and structures is 23% higher than the comparable estimate for 2003-04. Manufacturing has increased significantly (up 51%) whilst Mining, Wholesale and Construction have also had strong growth.

Estimate 4 is 10% higher than estimate 3 for 2004-05. Most industries have increased since Estimate 3, with the exception of Construction and Finance and Insurance, which have decreased slightly.

EQUIPMENT, PLANT AND MACHINERY

Estimate 4 for equipment, plant and machinery has decreased slightly since the comparable estimate for 2003-04. Other Services (down 18%) and Mining (down 13%) have contributed significantly to the decrease.

The fourth estimate for 2004-05 is 9% higher than Estimate 3. The increase is across all industries with strong growth from Construction (up 40%), Retail (up 27%) and Property and Business (up 22%).

MINING

Estimate 4 is 10% higher than the comparable estimate for 2003-04. Buildings and Structures contributed to all the increase.

Estimate 4 is 6% higher than Estimate 3 for 2004-05. Both building and structures (up 8%) and equipment, plant and machinery (up 2%) have increased since Estimate 3.

MANUFACTURING

The fourth estimate for 2004-05 is 5% higher than Estimate 4 for 2003-04. A 51% increase in buildings and structures was responsible for the increase.

Estimate 4 has increased by 2% from the comparable estimate for 2003-04. Increases in Wholesale, Property and Business Services and Construction offset small decreases in the other component industries.

Estimate 4 is 12% higher than Estimate 3 for 2004-05. All industries have increased since Estimate 3, with Construction (up 35%) and Retail (up 20%) showing the strongest growth. The increase was also spread across both asset types, with building and structures and equipment, plant and machinery increasing by 7% and 15% respectively.

EXPERIMENTAL PROJECTED CAPITAL EXPENDITURE

IN CURRENT PRICE TERMS

PROJECTED CAPITAL EXPENDITURE SERIES

The projected series below apply historical realisation ratios to contemporary expectations to convert these to quarterly figures. Trend estimates of resultant quarterly time series of actual and expected expenditure are produced.

The following graphs, with accompanying commentary, show the projected capital expenditure series based on September quarter 2004 data, which includes expected expenditure up to and including the June quarter 2005. Please see the paragraphs 28 to 32 of the Explanatory Notes for further details about the methodology and cautionary notes of this series.

TOTAL CAPITAL EXPENDITURE

Current price trend estimates for total capital expenditure had been declining slightly in recent quarters, after a period of strong growth. However expectations for the next financial year indicate that growth will occur in the next three quarters following a small increase this quarter. Mining and Manufacturing are the major contributors to this growth, with Other selected industries expecting a small decrease.

BUILDINGS AND STRUCTURES

Trend estimates for buildings and structures has shown strong growth since June quarter 2002 in current price terms. Strong expectations indicates this growth will continue for the 2004-05 financial year. The projected increase in buildings and structures is contributed to by all major industry groups.

EQUIPMENT, PLANT AND MACHINERY

Current price trend estimates for equipment, plant and machinery have been falling after reaching a peak in June quarter 2003. Although recent quarters have indicated this decrease was flattening out, weak expectations for the next three quarters suggest that this decline will continue. Other selected industries is projecting a strong decrease for the current financial year, whilst Mining and Manufacturing are indicating small increases.

MINING

Trend estimates for Mining have been decreasing in recent quarters in current price terms. However strong expectations indicate that this decrease is temporary and growth is predicted for this financial year. The majority of the growth is expected to be from a significant increase in buildings and structures.

MANUFACTURING

After reaching a peak in June quarter 2003, Manufacturing current price trend estimates had been declining but have started to grow in recent quarters. Strong expectations predict that the estimate will increase again over the current financial year. Buildings and structures expenditure has been increasing March quarter 2001, and it is predicted that the growth rate will rise significantly over the next few quarters. After recent decreases equipment, plant and machinery is expected to increase slightly.

OTHER SELECTED INDUSTRIES

Current price trend estimates for Other Selected Industries have been increasing slightly in recent quarters. Current expectations data however indicate that there will be a slight decrease over the current financial year. Buildings and structures expenditure has been strong over recent quarters offsetting decreases in equipment, plant and machinery. This is set to continue over the financial year. Transport and Storage is main contributor to the expected decrease.